The decision to permit 49 per cent foreign direct investment (FDI) in insurance is a good decision. For insurance companies, ability to get more capital and meet the solvency requirement helps in getting more business and growing faster.

The best performers in the sector have also expanded their capital to about Rs 700 to 800 crore. Others do not have adequate capital to grow. Hence the increase in the FDI limit would help.

Also foreign partners will be now more willing to bring in their expertise in product development, technology, and implement best practices.